(ITW) Illinois Tool Works Impresses Owners – Increases Divided

Illinois Tool Works Inc.’s (ITW) board of directors approved a 6.0% hike in the company’s quarterly dividend rate. The revised quarterly rate now stands at 36 cents per common share compared with 34 cents previously, resulting in an annual rate of $1.44 per common share. The revised dividend will be paid on October 12 to shareholders of record as of the close of business on September 30.

Illinois Tool Works follows a consistent policy of returning cash to shareholders via dividend payments with roughly $1.7 billion distributed over the last three years.

During the second quarter of 2011, the company paid around $170.0 million in dividends. Cash and cash equivalents at the end of the quarter was $1,230.7 million and net cash from operating activities was around $312.6 million.

Illinois Tool Works is one of the leading manufacturers of industrial products and equipment. The company operates through 800 business units in 57 countries. It recently declared its second-quarter 2011 financial results reporting earnings per share of 96 cents. The results increased 21.5% year over year, but fell short of the Zacks Consensus Estimate of $1.02.

The current Zacks Consensus Estimate for the third quarter of 2011 is $1.00 per share, representing a year-over-year increase of 21.08%. Earnings estimate for the fiscal year 2011 and 2012 is $3.86 and $4.47 per share, reflecting annualized growth of 27.39% and 15.85%, respectively.

We believe results going forward will be largely influenced by strengthening end markets, offset partially by growing costs of sales. Moreover, intense competition from its peers like Cooper Industries plc (CBE), General Electric Co. (GE), and Manitowoc Co. Inc. (MTW) raises our concern for Illinois Tool.

COOPER INDS PLC (CBE): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

ILL TOOL WORKS (ITW): Free Stock Analysis Report

MANITOWOC INC (MTW): Free Stock Analysis Report

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